This Morning: Applied Electron, Debating iPhone Numbers, New FB High

By Tiernan Ray

Here are some things going on this morning in your world of tech:

Shares of chip equipment maker Applied Materials (AMAT) are up $1.01, or 6.3%, at $17, after the company this morning said it will merge with Tokyo Electron (8035JP) in stock swap valuing the combined entity at $29 billion, the largest tool maker in the world.

Robert Maire of Semiconductor Advisors, referring to the new entity as Applied Electron, and suggesting a ticker symbol “APEL” (the entity is not yet named, and won’t trade as one until sometime next year), suggests buying Applied stock on the deal, writing that it will create an entity with a “huge footprint,” and that cost savings could be well beyond the printed $500 million per annum.

“In the critical etch space, Applied does Dielectric while Tokyo Electron does Conductor; CVD is strong for both.” He expects pressure on Lam Research (LRCX).

Shares of Apple (AAPL) are up $1.61 at $492.25, after Jefferies & Co.‘s Peter Misek issued a skeptical view of the company’s reported 9 million in first-weekend sales of the iPhone 5S and 5C. Based on reviews of the supply chain, Misek estimates the company sold 4 million of the 5S and 2.5 million of the 5C, with the rest being sold into the channel, meaning non-Apple stores. Misek opines “While 6.5 million sell-through is still solid, it is not a huge amount of upside.” He reiterates a Hold rating on Apple shares and a $425 price target.

On the other hand, Susquehanna Financial Group‘s Chris Caso raised his rating on Apple stock to “Positive” from Neutral, with a $625 price target, up from $440, writing that “When the facts change, we change our minds – and the facts over the weekend indicated that AAPL’s new phone lineup was more successful than we and many others had expected, even after accounting for the greater worldwide distribution at launch.”

Shares of Facebook (FB) hit a new high today since going public, $49.33, and are up $1.99, or 4%, at $49.18, after Citigroup‘s Mark May raised his rating on the shares to Buy from Neutral, and raised his price target to $55 from $32, writing that his inquiries with advertisers suggest positive trends in Q2 will sustain themselves for the company.

Speaking of Internet stocks, CNBC‘s Julia Boorstin a short while ago reported that “Twitter is leaning toward listing on the New York Stock Exchange, though there is no official decision made.” She says representatives of the NYSE visited Twitter executives, though there is “no pressure to make a decision now.” Twitter filed two weeks ago for an initial public offering, but did not disclose any financials, using an SEC rule that allows it to withhold such information.

Shares of Intel (INTC) are up 5 cents at $23.67 following a couple of positive notes this morning.

Piper Jaffray‘s Gus Richard, reiterating a Neutral rating on the shares, writes that Intel’s so-called rack scale architecture, introduced a couple weeks ago, which is an integration of fiber optics communications into server chip designs, “could be a game-changer as it applies high volume semiconductor manufacturing practices to optical networking.”

“After 10 years of working on the technology, we think Intel is likely light years ahead of competitors in terms of commercialization.”

And Ashok Kumar of Maxim Group, who has a Buy rating on the stock, writes that the recently introduced “Bay Trail” processor for tablet computers and converged tablet-notebook hybrids, is superior to comparable chips from competitors using ARM Holdings (ARMH) technology.

There continues to be speculation about BlackBerry‘s (BBRY) announcement yesterday it will go private with the help of 10% holder Fairfax Financial. The stock got two upgrades today, from Cowen & Co.’s Tim Arcuri, raising the shares to Market Perform from Underperform, and from Canaccord Genuity’s Mike Walkley, raising the stock to Hold from Sell.

But MKM Partners’s Michael Genovese writes that he is still comfortable with his Sell rating on BlackBerry, writing “The bottom line is we do not believe it is likely that a non-recent BlackBerry insider steps forward with a higher offer in the go-shop period. We think it is more likely Fairfax could end up lowering its offer by the November 4th deadline.”

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There are 18 comments

SEPTEMBER 24, 2013 10:53 A.M.

Ed wrote:

Tell Misek to go F himself and while your at it, tell Shope from GS that we appreciate his PT increase of $20.00! Way to go Bill

SEPTEMBER 24, 2013 11:06 A.M.

Dale wrote:

Sounds like Misek missed big time and is trying to blame Apple for his ineptness as an analyst.

SEPTEMBER 24, 2013 11:14 A.M.

kranthi wrote:

Misek upgrade BBRY and downgraded AAPL last month. Glad I didn't sell my house and followed his advice. Not sure if his boss is impressed with his call.

SEPTEMBER 24, 2013 11:35 A.M.

Roberto Nucera wrote:

Could you please provide color on the FB upgrade by Citi?

SEPTEMBER 24, 2013 11:38 A.M.

Bobby Dig wrote:

Why does Misek think he is important? I don't, the loser can't predict a freaking thing. Analysis don't predict, they guess, like most of Wall St.

SEPTEMBER 24, 2013 11:39 A.M.

DG wrote:

Misek is very biased in his opinion on Apple, that is not a sound investment advice. He is not changing it even when Apple sold 9M iphones over weekend much greater than company's own expectation that they had to file with SEC for the revised future earnings with material impact. It dont matter for Apple if its sell directly to customers through their own shop or through walmart or other "channels" per Mr Peter Misek as its going to make a impact on there revenue. Misek is just trying to find out a negative thing just to justify and stick to his stubborn opinion. And look at his opinions last month upgrade BBRY and downgrade AAPL. Very biased opinions, would love to see the disclosures of the Jeffrey's portfolio holdings.

SEPTEMBER 24, 2013 11:48 A.M.

freddysrevng wrote:

BlackBerry did over a million BBM downloads in 8 hours on an "unofficial leaked version"... sounds like people want BBM - how will TheStreet "spin this to the contrary"??? We will wait and see.

BlackBerry had no reason to have BBM "kill it" over the weekend - it would have driven up the stock and "potentially" queered the deal for Prem....

Lots of nice "deals" announced by BlackBerry today - although none of it is listed by "TheStreet/Yahoo Apple Hyping Media Consortium" and you will see plenty of other good news over the coming weeks...

Why?

I guess Prem is going to show you how to "Market BlackBerry" to get a higher price for the stock he owns and, hopefully, have someone else "outbid" Farifax so he can collect his $150mil on his .30 per share if someone else buys BlackBerry.

Gotta hand it to Prem - he doesn't care about the retail investors who have been pounded while owning BlackBerry - but he knows how to take care of #1....

Prem should have been CMO because Frank Boulben ... not so much.

If BlackBerry goes under - it will have been one of the most disgusting examples of the destruction of a company by the US media and Wall Street greed of a company, based in, probably our "greatest ally's country".... shameful...

SEPTEMBER 24, 2013 11:52 A.M.

freddysrevng wrote:

If any of you saw the iPhone 5S - please share with us why it is "better/different" than the iPhone 5..... Misek is telling you the truth that the days of Apple putting an "S" on a phone and telling you it is "revolutionarily different" and "getting away with it" are coming to an end.

Even iTarded iSheeple are getting "hip" to this routine.... although some of them still don't know how to buy stuff on line and have to stand in line...with all of the "iPhone Scalpers" employing homeless people to stand in line then not paying them - real class... iTardia...

SEPTEMBER 24, 2013 11:59 A.M.

Paul wrote:

Apple should be near 600 right now. Laughing at all the High Powered Upgrades by all the experts today, and the stock hasn't moved. Manipulation at it's best. Watch out for Goldman, they upgrade and usually do the opposite. Shope is an expert here. Watch out below.

SEPTEMBER 24, 2013 12:04 P.M.

TruthSeeker wrote:

So we had a weekend where nut cases waited in the rain to replace the phone they bought last month. The lunatics of the world will always be with us, but its unlikely to be a good idea to have them influence our judgement. Is that lunacy supposed to give meaning to an investor? Is it supposed to be an indicator of future market share? Or is the fact that Apple down to about 13% of all smart phone sales, with rapidly declining market share the better indicator?

I've been holding the stock and patiently waiting. The ouster of the co-ceo's (what as stupid idea that was) gave me hope.
Thorsten - gave me hope. Displays at trade shows (RSA in particular) - gave me hope.
But the outright lack of carrier partner marketing, the ignoring of all market trend data, and obstinate attitude shouldve signalled to us all that the new management was as clueless as the old.
The surprise press release Friday and the stock manipulation while Prem primed the market for his lowball, disgrace to shareholders bid yesterday was the last straw.
I'm out. I sold my position.
And I hope the SEC looks into the games of the last 3 months there, the manipulation Friday and yesterday, and if the lawyers come out looking for folks to join a class action suit, I'm in.

SEPTEMBER 24, 2013 2:40 P.M.

Sam wrote:

Apple had its orgasm. Now back to realty. Down down down she goes. Company blows.

SEPTEMBER 24, 2013 4:30 P.M.

Re BlackBerry, RIM, BoD, Canadians... wrote:

Wiki: John Wilson, 2nd Baron Moran. And check out footnote #1 Reference. It's a bbc pdf. Wilson was the UK's High Commissioner to Canada from 1981-84. Hope the CBC sees this. Wilson called Canadians an unimpressive and unimaginative people with politicians of limited ability. And anybody and everybody gets the Order of Canada. Even the Governor General told Canadians in his speech in Ottawa on Canada Day to be "smarter". Like duh chief! Way to go. Spell it out for the world or what. Hmm.

And if RIM's co CEOs was not bad enough. The board carried on the legacy.

I seriously doubt Prem Watsa is going to pay $9 a share. He has no obligation. And if Prem Watsa pays $9 per share when there are no other groups interested. Then what's that tell you? He's a Canadian. That's what that tells you. LOLOLOLOL

SEPTEMBER 24, 2013 4:37 P.M.

@ freddysrevng wrote:

Can't you find some kind of a morbid subculture that celebrates life by abusing themselves. We've experienced you enough. You're ready to go pro dude. Blackberry's days are limited. Think of your future.

SEPTEMBER 24, 2013 4:46 P.M.

Re Peter Misek and his pathological narcissism. wrote:

He's skeptical. Right. You mean he's calling Apple's CEO Tim Cook a liar? And what happens. Apple ignores him. Whereas the analyst James Faucette from Pacific Crest said droves of people are returning their Blackberry Z10s and returns are outnumbering sales; Blackberry threatens to sue Faucette. Yet Faucette was dead on. Maybe the reason we're not hearing anything from Faucette is because of further threats... Hmm.

SEPTEMBER 24, 2013 4:58 P.M.

Anonymous wrote:

I have difficulty believing any technical advantages that Blackberry may have are enduring over any length of time. Ratcheted down for an enterprise only business that's privatized that gets by on break even profits and just one law suit will destroy them because R&D is finished. And any students at the U of Waterloo better be aware of these old Canadian buzzards who are self appointed aristocrats looking for the free intellectual property created by the young and bushy tailed. Just look at the legal threats RIM tossed at the rival messaging service called KIK; created by sixteen kids...

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.